Annual Consultant Report - The Predictive Index

ReportConsultant

Annual

2019

Study reveals consultants’ #1 growth

blocker, how they spend their time, and

the services driving business success

Introduction

In April 2019, The Predictive Index surveyed 152 consulting professionals, from partners to

directors, case managers to associates, all coming from a range of firm sizes.

Given the vastness of the industry and the diversity of offerings within it, we focused on a few

key areas: how consultants structure their businesses; their priorities and challenges with their

clients; how they view themselves; and how they’re preparing for the future.

This report is a snapshot of the state of consulting for 2019—the good, the challenging and the

journey ahead.

The report is divided into three sections:

1. No two consulting offerings are exactly the same—though there are some striking similarities.

2. Consultants are confident in their abilities, but there’s one major challenge that keeps them up at night.

3. Clients are consultants’ best source for anticipating industry shifts ahead—and all roads lead to talent.

2019 Annual Consultant Report 2


SECTION 1No two consulting offerings are exactly the same—though there are some striking similarities.

When you think of your own consulting business, do you know where you stand

among your peers?

FINDING #1: Consultants come with a wide range of expertise, but the trend is clear: Strategy and people consulting are king.

We asked consultants this simple benchmark question: “What consulting services do you offer

your clients?” They selected all that applied. The answer: Nearly 75% offer strategy consulting.

Human resources or people consulting services are a close second, coming in at just over 60%.

What does this mean for your consulting firm?

Clients will always have varied needs for consulting services, but strategy and people consulting

are essential offerings to drive business success. Consultants who effectively pair their

business strategy consulting with people strategy insights have a major competitive advantage.


FINDING #2: When it comes to structuring fees, charging on a project-by-project basis at a competitive market rate remains the norm.

Nearly 50% of consultants answered they charged clients by the project confirming that

consultants continue to structure their fees as has been tradition.

A surprising, notable insight: The third most popular fee structure is based on performance,

indicating clients’ increasing focus on having a clear ROI on consulting services, and those

consultants committing to delivering results.


If your consulting fee structure is project-based, assess your client base and the projects you’re

working on. Project-based work means more time spent on business development to secure

that next engagement and less time at the client site.


FINDING #3: Consultants spend over 50% of their time on business development, cutting down on time spent interfacing with clients.

Our consultant respondents confirmed they spend more than half of their working hours

pursuing their next engagement, leaving less bandwidth for valuable time spent working with

their clients and securing repeat business. On the high end, consultants spend 80% of their time

focused on winning new business, with the low end of business development at 30%.

Continued



Our findings confirm what we know in the market: Not all consultants are created equal. Some

are more adept at business development. Others are strong at executing, meaning they spend

the majority of their time interfacing with the client.

In your ideal world, how much time would you prefer to spend working directly with clients

versus securing new business? Consider how you structure your consulting team, so that each

consultant can spend their time doing what they do best. Optimizing your consultant talent

strategy can allow you to be best in class.



SECTION 2Consultants are confident in their abilities, but there’s one major challenge that keeps them up at night.

Winning new business comes with its own challenges. When you’re up against the

competition, how do you stand out and prove ROI to clients?

FINDING #4: Consultants see themselves as having well-rounded strengths, but most agree they can improve upon winning new business and building their networks.

Our respondents are confident in their subject-matter expertise and their abilities to get things

done for their clients. But nearly a third still feel challenged to win new business and building

their consulting networks.

Continued



Knowing that, on average, more than half of consultants’ time is spent on business

development, it can be difficult to reconcile the need to pursue new clients when you are

confident in your ability to deliver value and get things done. Sales proficiency is not something

that clients value, and therefore not a priority for consultants.

Think back to how you structure your organization: Do you have a dedicated business

development function, or have you identified talent more adept at sales? Consider leveraging

your team’s strengths to develop a strategy that works best for your firm.

When it comes to networking, building rapport with peers and industry leaders creates

opportunities for referral generation. Regardless of whether your organization has a dedicated

business development function, a strong referral network can be a game changer. When you

make your network work for you, you can spend more time on consulting and less time focused

on pursuing and winning new business.


FINDING #5: When it comes to setting their firm goals, edging out the competition and increasing revenue are the primary objectives.

When it comes to business goals, nearly one third of consultants agreed that improving their

competitiveness in the market was a priority, with another third focused on increasing revenue

growth. What stands out is that increasing repeat business is only the third highest priority in

our results—and this is the key to success in both competitiveness and revenue.


Improving competitiveness and increasing revenue growth are seen as inextricably linked. With

everyone vying for new business in a competitive market, focusing instead on building long-

term client relationships and securing repeat business will establish your firm as best in class

and a trusted partner. This underappreciated lever will increase margins and drive your revenue,

securing your path to improved growth.


FINDING #6: Biggest growth blocker for consultants? Proving ROI to clients.

While consulting offerings vary, there’s one commonality: a need to prove immediate and

downstream ROI for the client. Regardless of services rendered, clients want to know that they

spent their time and money well. Without a clear understanding of ROI, they’re less likely to hire

consulting services or retain them.


When selling your services, consider how you prove ROI to your clients. Yes, value can be

hard to measure, so building a learning organization within your firm is essential. Consultants

have the opportunity to always be gathering data on their projects, which can then be used to

measure the impact of the work they are doing and prove demonstrable ROI. This data can be

further analyzed and learned from, making it easier to pitch to the next client.



SECTION 3Clients are consultants’ best source for anticipating industry shifts ahead—and all roads lead to talent.

Based on our findings, we know that strategy and people consulting are integral

offerings. But the study shows clients are telling consultants a need for strong talent

consulting services is on the rise.

FINDING #7: When it comes to keeping up with industry trends, real-world client interaction edges out armchair expertise.

We asked consultants to indicate all the ways in which they learn about future business trends,

and a whopping nearly 86% said they learned from their clients, with industry leaders coming in

at a close second. This confirms what we know in the market: Clients will always be the number

one source of information.


Your clients know what they need, and as a consultant, you’re an expert at learning from

them. This is why building a learning organization within your firm is essential. Best in class

consultants take advantage of every interaction with clients, both onsite and throughout the

business development process. There are learning opportunities at every turn, so it is essential

for consultants to operate with a learning mindset.


FINDING #8: Consultants know clients’ biggest challenges all relate to talent.

Our study found that regardless of consulting services offered, consultants know that their

clients could use consulting expertise in areas surrounding talent management and aligning

employees with the client business strategy. At the end of the day, all business challenges relate

to people considerations. Although clients are pursuing multiple challenges in multiple areas,

solving those challenges and executing against the business strategy is impossible without the

right talent.


Consultants will need to ensure their consultant offering caters to their client’s talent strategy,

with a major focus on the overall organizational design. The core of a client’s business strategy

will need to place importance on the people tasked with implementation, as well as setting

succession plans to secure future success.


Survey Methodology

In April 2019, The Predictive Index conducted a survey of consulting firm owners, senior

managers, middle managers, and individual contributors. We secured respondents via a panel

provider called Critical Mix.


Annual Consultant Report - The Predictive Index

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